Central Bank of Ireland overhauls QIAIF pre-submission process

Claire Winrow of Pinsent Masons said: “This update issued by the Central Bank is hugely helpful for managers of loan origination funds, funds with high leverage and property funds investing outside of Ireland.”

Her comments came after the CBI revised its guidance on the pre-submission process for certain QIAIFs, which are Irish investment funds designed for use by professional investors and other high net worth individuals.

Most QIAIFs are given fast track approval by the CBI, under which it authorises a QIAIF in 24 hours without reviewing the fund documents. However, in 2020, the CBI introduced a pre-submission process for certain asset classes – including loan origination funds, real estate funds, funds with high leverage and funds investing in life settlements.

Now, the CBI has changed the pre-submission process so that it only applies to funds investing in Irish real estate or crypto assets. A QIAIF proposing to invest no more than 10% of its net asset value in cash-settled bitcoin futures traded on the Chicago Mercantile Exchange will not be subject to the pre-submission process, provided that the cover letter accompanying its application refers to the inclusion of crypto-assets exposure.

Winrow said: “Loan origination funds, property funds investing outside of Ireland, funds with high leverage and life settlement funds are no longer subject to a pre-submission and can now benefit from the 24-hour fast track authorisation for QIAIFs. The clarification is one of a number of updates which the Central Bank is making to clarify the application of its rules and the authorisation process for QIAIFs and is a very welcome development.”

QIAIFs will also need to obtain shareholder approval to revise their investment strategy if they apply for a post-authorisation amendment to introduce exposure to crypto assets. The CBI also said this must be set out in the cover letter.

Winrow said: “This change will also greatly assist managers looking to make investments through an Investment Limited Partnership (ILP) structure, as the ILP is predominantly used to invest in asset classes suitable for closed-ended funds and many will now be able to avail of the 24 hour fast track authorisation process.”